WORK-FROM-HOME SETUP AND AUDIT QUALITY AMONG EXTERNAL AUDITORS

Lord Eddie Indac Aguilar, Jessa Mae Rome Alcantara, Airah Yvonne Tormis Camoro, Alexiz John Inocentes Olanolan

Abstract


Research Purposes. Technological advancement and globalization increase demand for flexible work arrangements, particularly remote working, which pose limitations and challenges to auditors in maintaining audit quality. The study aims to determine which domain of work-from-home setup significantly influences the audit quality of external auditors.

Research Methods The study used quantitative research design and correlational techniques to test the relationship and significance of the variables. It was participated by CPAs in public practice who experienced remote auditing and employed the random sampling technique in selecting the respondents. The data were analyzed and interpreted using the mean, standard deviation, Pearson's correlation, and regression

Research Results and Findings. The results concluded that the effectiveness of work-from-home setup and audit quality have a moderately strong, positive correlation. Only the propensity to work remotely and work-life balance significantly influenced the audit quality of external auditors. The findings imply that despite the physical absence and changes in processes, working from home can be an effective work setup in attaining and maintaining high-quality audits and has the potential to address the demand for flexible work arrangements if appropriately administered. The study suggests strengthening remote audits by creating and utilizing online tools for managing audit activities, such as submission of evidence, planning, and audit preparation.


Save to Mendeley


Keywords


Remote Audit; Audit; Flexible Work Arrangement

Full Text:

PDF

References


Aczel, B., Kovacs, M., Van der Lippe, T., & Szaszi, B. (2021). Researchers working from Home: Benefits and Challenges. PLoS ONE Journal, 16(3), 1-45. https://doi.org/10.1371/ journal.pone.0249127.s001.

Amorado, R.V., Boholano, H.B., & Talili, I.N. (2017). Quantitative Research: A Practical Approach. Malabon City: Mutya Publishing House Inc.

Appelbaum, D., Budnik, S., & Vasarhelyi, M.A. (2020). Auditing and Accounting During and After the COVID-19 Crisis. Retrieved from https://www.cpajournal.com/2020/07/08/auditing-and-accounting-during-and-after-the-covid-19-crisis/, Februari 28, 2022, 11.00 AM.

Ashforth, B.E., Kreiner, G.E., & Fugate, M. (2000). All In a Day's Work: Boundaries and Micro Role Transitions. The Academy of Management Review, 25(3), 472-491. https://doi.org/10.5465/AMR.2000.3363315.

Barrero, J.M., Bloom, N., & Davis S.J. (2021). Why Working from Home will Stick. Working Paper. Becker Friedman Institute for Economics: Cambridge.

Bick, A., Blandin, A., & Mertens, K. (2023). Work from Home Before and After the COVID-19 Outbreak. American Economic Journal: Macroeconomics, 15(4), 1-39. http://doi.org/ 10.1257/mac.20210061.

Bickle, J. T., Hirudayaraj, M., & Doyle, A. (2019). Social Presence Theory: Relevance for HRD/VHRD Research and Practice. Advances in Developing Human Resources, 21(3), 1-17. https://doi.org/10.1177/1523422319851477.

Bongato, J. (2020). This Moment, Too, is Worth Living. Retrieved from https://issuu.com/ mindanaotimes/docs/mt_06012020_01, August 24, 2022, 02.00 PM.

Brown, V. L., Gissel, J. L., & Neely, D. (2016). Audit Quality Indicators: Perceptions of Junior level Auditors. Managerial Auditing Journal, 31(8/9), 949-980. https://doi.org/10.1108/MAJ-01-2016-1300.

Byrnes, P .E., Al-Awadhi, A., Gullvist, B., Brown-Liburd, H., Teeter, R., Warren, J. D., & Vasarhelyi, M. (2018). Evolution of Auditing: From the Traditional Approach to the Future Audit. In Chan, D. Y., Chiu, V., & Vasarhelyi, M. A. (Ed.). Continuous Auditing: Theory and Application Emerald Publishing Limited (pp. 285-297). Leeds: Emerald Publishing Limited.

Caduaya, E. Z. (2022). Mindanao Area Suffers Connectivity Problem. Retrieved from https://newsline.ph/environment/2022/08/05/mindanao-area-suffers-connectivity-problem/, August 24, 2022, 01.00 PM.

Calefato, F., & Lanubile, F. (2010). Communication Media Selection for Remote Interaction of Ad Hoc Groups. In Zelkowitz, M. V. (Ed). Advances in Computers: Improving the Web (pp. 271-313). London: Elsevier Inc.

Carvalho, V.S., Santos, A., Ribeiro, M.T., & Chambel, M.J. (2021). Please, Do Not Interrupt Me: Work–Family Balance and Segmentation Behavior as Mediators of Boundary Violations and Teleworkers’ Burnout and Flourishing. Sustainability, 13, 1-15. https://doi.org/10.3390/su13137339.

Chartered Institute of Internal Auditor. (2020). Position Paper: Internal Audit’s Relationship with External Audit. Retrieved from https://www.iia.org.uk/resources/delivering-internal-audit/position-paper-internal-audits-relationship-with-external-audit/.

Christensen, B. E., Glover, S. M., Omer, T. C., & Shelley, M. K. (2015). Understanding Audit Quality: Insights from Audit Professionals and Investors. Contemporary Accounting Research, 33(4), 1648-1684. https://doi.org/10.1111/1911 -3846.12212.

Clancy, M. (2020). The Case for Remote Work. Working Paper. Iowa State University: Iowa.

Creswell, J.W. (2012). Educational Research: Planning, Conducting, and Evaluating Quantitative and Qualitative Research. Boston: Pearson.

De Lucas Ancillo, A., Del Val Núñez, M. T., & Gavrila, S. G. (2020). Workplace Change Within the COVID-19 Context: A Grounded Theory Approach. Economic Research-Ekonomska Istraživanja Taylor & Francis Online, 34(1), 2297-2316. https://doi.org/10.1080/1331677X.2020. 1862689.

Faulds, D. J., & Raju, P. S. (2020). The Work-From-Home Trend: An Interview with Brian Kropp. Business Horizons, 64(1), 29-35. https://doi.org/10.1016/j.bushor.2020.10.005.

Fischer, S. (2020). Responding to COVID-19: The End of the ‘Traditional Audit’?. Retrieved from https://www.asi-assurance.org/s/post/ a1J1H000004oLhhUAE/p0798, May 7, 2022, 10.00 AM.

Fraenkel, J. R., Wallen, N., & Hyun, H. H. (2012). How to Design and Evaluate Research in Education. New York: McGraw-Hill.

Gisbert, S. B., & Huerta, J. D. (2022). Evolution, Current Situation, Advantages and Disadvantages in Spanish Organizations in the Field of Teleworking. Working Paper. Universitat Jaume I: Spain.

Greer, T. W., & Payne, S. C. (2014). Overcoming Telework Challenges: Outcomes of Successful Telework Strategies. The Psychologist-Manager Journal, 17(2), 87-111. https://doi.org/10.1037/mgr0000014.

Hazaea, S.A., Tabash, M.I., Rahman, A.A.A., Khatib, S.F.A., Zhu, J., & Chong, H.C. (2022). Impact of the COVID-19 Pandemic on Audit Quality: Lessons and Opportunities. Emerging Science Journal, 6, 71-86. https://doi.org/10.28991/esj-2022-SPER-06.

International Federation of Accountants. (2014). A Framework of Audit Quality: Key Element That Create an Environment for Audit Quality. Retrieved from https://www.iaasb.org/ publications/framework-audit-quality-key-elements-create-environment-audit-quality-3.

Ipsen, C., Van Veldhoven, M., Kirchner, K., & Hansen, J. P. (2021). Six Key Advantages and Disadvantages of Working from Home in Europe During COVID-19. International Journal of Environmental Research and Public Helath, 18(4), 1-17. https://doi.org/10.3390/ijerph 18041826.

Irawanto, D.W., Novianti, K.R., & Roz, K. (2021). Work from Home: Measuring Satisfaction Between Work–Life Balance and Work Stress During the COVID-19 Pandemic in Indonesia. Economies, 9(3), 1-13. https://doi.org/10.3390/economies9030096.

Johnsson, C., & Persson, N. (2021). Auditing In Times of Change: A Qualitative Study on How Covid 19 Will Affect Audit Quality. (Thesis, Departement of Business Studies, Uppsala University, Sweden). Retrieved from https://www.diva-portal.org/smash/get/ diva2:1574785/FULLTEXT01.pdf.

Manikandan, S. (2011). Measures of Central Tendency: The Mean. Journal of Pharmacology and Pharmacotherapeutics, 2(2), 140-142. https://doi.org/10.4103/0976-500X.81920 .

Marasigan, D. P. (2020). The Effectiveness of ‘Work from Home’ In a Private Service Company. International Journal of Academic and Industry Research, 1(2), 1-25. https://doi.org/10.53378/345593.

Nida, B., Tufail, M.S., & Saleem, S. (2022). Violating My Home Boundaries Makes Me Dislike My Job: A Multiple Mediation Model. Economic Research-Ekonomska Istraživanja Taylor & Francis Online, 35(1), 6626-6647. https://doi.org/10.1080/1331677X.2022.2052334.

Oh, C. S., Bailenson, J. N., & Welch, G. F. (2018). A Systematic Review of Social Presence: Definition, Antecedents, and Implications. Front Robot AI, 5(114), 1-35. https://doi.org/10.3389/frobt.2018.00114.

Putrevu, J. (2021). The Efficacy of Remote Auditing in Ensuring and Enhancing the Efficiency of the Internal Audit. Conference. International Conference on Opportunities and Challenges in Management, Economics, and Accounting: Paris. Proceeding. 8th International Conference on Opportunities and Challenges in Management, Economics and Accounting: Paris.

Rachmawati, R., Choirunnisa, U., Pambagyo, Z. A., Syarafina, Y. A., & Ghiffari, R. A. (2021). Work from Home and the Use of ICT During the COVID-19 Pandemic in Indonesia and its Impact on Cities in the Future. Sustainability, 13, 1-17. https://doi.org/10.3390/su13126760.

Rikkert, M. (2020). The Effect of Work Pressure on Audit Quality Within a Big-4 Accounting Firm. (Thesis, Faculteit der Managementwetenschappen, Radboud University: Nijmegen). Retrieved from https://theses.ubn.ru.nl/handle/ 123456789/10162.

Satya, R. I., & Shauki, E. R. (2021). Remote Audit Post Covid-19 Pandemic in Achieving Professional Skepticism Auditor: Implementation of Social Presence Theory. Proceeding. Sriwijaya Economics, Accounting, and Business Conference (SEABC 2021): Palembang.

Schall, M.A. (2019). The Relationship between Remote Work and Job Satisfaction: The Mediating Roles of Perceived Autonomy, Work-Family Conflict, and Telecommuting Intensity. (Thesis, Department of Psychology, San Jose State University: California, United States of America). Retrieved from https://scholarworks.sjsu.edu/cgi/ viewcontent.cgi?article=8564&context=etd_theses.

Shitandi, A.O. (2020). An Examination of the Drivers of External Audit Quality of Commercial Banks in Kenya. (Thesis, Strathmore Business School, Strathmore University: Kenya. Retrieved from https://su-plus.strathmore.edu/server/api/ core/bitstreams/237b5e08-91ce-4dd6-906b-7d06d95605f6/content.

Teeter, R.A, Alles, M.G., & Vasarhelyi, M.A. (2010). Remote Audit: A Research Framework. Journal of Emerging Technologies in Accounting, 7, 73-88. https://doi.org/10.2308/jeta.2010.7.1.73.

Vyas, L., & Butakhie, N. (2020). The Impact of Working from Home During COVID-19 on Work and Life Domains: An Exploratory Study on Hong Kong. Policy Design and Practice Taylor & Francis Online, 4(1), 59-76. https://doi.org/10.1080/25741292.2020.1863560.

Wang, B., Liu, Y., Qian, J., & Parker, S.K. (2021). Achieving Effective Remote Working During the COVID-19 Pandemic: A Work Design Perspective. Applied Psychology Journal, 70(1), 16-59. https://doi.org/10.1111/apps.12290.




DOI: https://doi.org/10.33508/jako.v16i2.5481